Month: June 2011

After touching the downtrend line from 1.6441 to 1.6261, GBPUSD dropped from 1.6118. Now the fall from 1.6118 would possibly be resumption of downtrend from 1.6546. Deeper decline to test 1.5912 previous low support is expected later today, a breakdown below this level will signal resumption of downtrend, then next target would be at 1.5700. Resistance is at 1.6118, only break above this level could indicate that lengthier consolidation of downtrend is underway.

Forex Signals

Three of the Best Dividend Investments in the World

by Carl Delfeld, Investment U Senior Analyst
Thursday, June 30, 2011: Issue #1546

When I was with a Wall Street firm, it was common for stockbrokers to mock investors who focused on income.

Traditionally, income meant bonds… And in the old days many bonds came with coupons, which investors clipped and then cashed… And nothing was worse than being labeled a “coupon clipper.” But today, bond investors do have it even worse.

• One-year Treasuries yield nearly 0.19% right now.

• Meanwhile, inflation just hit 3.6%, according to the latest estimates from the Bureau of Labor Statistics.

That means you’re actually losing purchasing power by “collecting income” from one-year Treasuries right now.

So if you’re looking to add to your income portfolio, what’s an investor to do?

Outperforming Bonds and More Stable Than High-Growth Stocks

In a word: dividends.

Dividend-paying stocks are not only outperforming in terms of bonds… They tend to be more stable than high-growth stocks. And in uncertain times like these, that’s an important consideration.

The question is: Where can you find the best dividends in the world today?

For the answer, you need to look overseas… Here’s what I mean…

Going Global for Strong Dividend Yields

Companies overseas offer a great opportunity to bolster your dividend portfolio.

Take Asia, for example.

In 2010, companies in the MSCI Asia-Pacific Index paid out almost as many dividends as those listed in the S&P 500.

And according to Matthews Funds, from 2002 to 2009, Asian companies grew dividends at a compound annual growth rate of 18%, compared to 10% for the S&P 500. Japan, China, Australia, Taiwan and Hong Kong are the biggest dividend payers in the region.

Europe also offers some strong opportunities:

• France Telecom (NYSE: FTE) offers an 8.9% dividend yield.

• British American Tobacco (AMEX: BTI) has a 4.2% dividend yield and a 17% annual dividend growth rate over the past five years.

All of these are worth considering.

But my favorite dividend investments right now aren’t stocks. They’re exchange-traded funds (ETFs).

These investment vehicles offer instant diversification, low costs, strong profits tied to emerging market growth, and still provide yields that crush bonds.

My Three Favorite Global Dividend ETF Investments

Here are my three favorite dividend ETFs right now…

• DIVIDEND ETF #1: The brand new Global X SuperDividend ETF (NYSE: SDIV) tracks the performance of 100 equally weighted dividend companies from around the world. SDIV provides good diversification with exposure to REITs (22%), consumer discretionary stocks (16%), telecommunications (16%), financial services (10%), utilities (8%), banking (5%), consumer staples (5%), energy (5%), industrials (5%), insurance (3%), technology (3%), and health care (2%).Nearly 32% of the companies in the basket are U.S.-based, 24% in Australia, 10% in Great Britain, 6% in Canada and 4% in Singapore, among others. In addition, the fund currently pays out 4.08% annually.

• DIVIDEND ETF #2: Second, consider one of my long-time favorite ETFs, the PowerShares International Dividend Achievers Portfolio (NYSE: PID). To become a part of this exclusive basket, companies must have a record of increasing their dividends for five consecutive years. The United Kingdom and Canada comprise 50% of its holdings. U.S. companies make up a mere 6%. The fund has risen steadily up 8.16% over the last 12 months and is currently returning an annual yield of 2.81%.

• DIVIDEND ETF #3: Finally, if you’d like more Asia and emerging-market exposure, purchase WisdomTree’s Emerging Market Equity Income ETF (NYSE: DEM). DEM has 20% exposure to Taiwan and 20% to Brazil. Telecom companies make up a majority of the companies in the basket. You can expect it to distribute dividend income in the area of 5% annually.

With this global triple play, your stock portfolio will get a welcome shot of income – and global diversification.

Good investing,

Carl Delfeld

By Cedric Welsch

About the Author

The uprising of forex techniques will always make things a little extra competitive to all.
Whereas, you as a wise trader, must always look at the fundamental fx trading strategies.

After Greece passed its austerity budget in parliament yesterday, the governments of Europe have been analyzing and speculating about what comes next. Though securing another installment of its International Monetary Fund (IMF) bailout, the citizens of Greece expressed their anger at the measure in a day of intense rioting and violence.

Protesters were filling the streets and attempting to blockade entry for MPs trying to enter the parliamentarian building and stop the vote. The budget package includes such measures that will put more pressure on the economically underprivileged in the country, possibly resulting in a refusal to pay taxes among individuals unable to survive by doing so.

Markets responded favorably to the news that Greece was addressing its debt concerns, but a sentiment is being passed around that the medicine may cure the disease, but kill the patient. If Greek citizens begin to resist the payment of taxes, a threat of default moves from possible to inevitable and the region will once more be thrown into turmoil and the EUR may find itself under attack and at risk of dissolving.

The agency Statistics Canada released news this afternoon in line with what several analysts were expecting after yesterday’s CPI figures. Canadian GDP stagnated at 0% growth for the past month, but was optimistically above the forecast contraction of 0.1% and therefore acted as a general buy signal for investors.

Wednesday’s nominal and core CPI data signaled growth across consumer prices that hinted at a rise in economic output. Today’s GDP reflected the reality of this growth. So far the Canadian dollar (CAD) is on a bull run amid this positive news, and looks to continue gaining so long as the rest of the world fidgets with angst amid Greece concerns and an uncertainty about risk appetite.

The consumer spending report out of France this morning came out below forecasts and highlighted a contraction of 1.5% in consumer spending for June. The monthly report was forecast to reveal 1.0% growth in this vital sector of the French economy, but the sudden contraction has sparked worries that Europeans may be avoiding consumption in an effort to save for the hard times ahead should Greece continue to experience problems.

The Greece austerity vote, which took place Wednesday and passed 155-138 in parliament, has wrinkled portfolio analyses given its sensitive nature. The impact on risk appetite is being felt across multiple sectors of the European economies, a French spending decline being one of the earliest signals.

The National Bank of New Zealand’s report on consumer confidence this month struck an optimistic tone with investors, who have been moving sporadically in and out of risk these past two weeks as the crisis in Greece captivates headlines. The report, which came in significantly higher than last month, underlines a growing trend in the Pacific countries that are seeing more growth than their other Western counterparts in Europe and the Americas.

The NBNZ figure acts as a leading indicator of economic health in New Zealand. It factors into portfolio analyses regarding such growth measures as consumer spending, income levels, financial and economic outlook, as well as business optimism toward expansion. With the figure growing in June, many traders are attempting to anticipate a bull run for the New Zealand dollar (NZD) in the days ahead.

It was late in yesterday’s trading day that I glanced up from my 10 trading screens to the TV that sits above.

Usually CNBC is broadcasting on mute for most of the day (I turn it up when I think there might be someone important to listen to).

There was an image of what looked like some very important people and then I saw our good friend Helicopter Ben Bernanke, with the headline at the bottom of the screen reading:

“Fed Limits Credit Card Fees”

Normally, I would turn up the volume, but I knew exactly what was happening and immediately I looked at my trading screen to find Visa and MasterCard both up over 10%.

I was enjoying the moment and then the phone rang…

A friend of mine who trades stocks in NYC called to tell me the news and inform me that he is buying more Visa and Mastercard shares. He wanted to get my opinion on the purchase; I asked him if he reads Smart Investing Daily. He started laughing and then said, “You were already in, weren’t you?” I told him I’d add his name to our list.

In all honesty, I had already taken most of my profits in both names. Investors who subscribe to WaveStrength Options Weekly were positioned in MasterCard back when it was trading around $240 a share in March. I brought the idea to all of you here in Smart Investing Daily (SID as we call it) back on April 1, 2011, when the shares were trading $253. I’m not saying all this to gloat (OK, maybe a little shameless self promotion), but rather to show you a couple different styles of investing and why investor types are different.

Investor Type #1: The Reactor

Many traders and investors are reactionary, like my friend in NYC. They react to news, earnings, data, charts, etc. For many beginners, this is the most common way to invest. You hear something and then act on what you hear.

An example of a reactive investor is someone who bought Visa or MasterCard shares on yesterday’s news thinking that this new rule may restrict credit card companies, but still allow them to make money and grow, and clear the air of further regulation.

Reactive investors may jump into a stock after hearing a favorable earnings report where the company offers strong profit growth estimates.

Don’t get me wrong — reactor investors can make money as well, but usually it’s less than the other two types of investors that I am going to outline.

Reactive investors are usually moving with the herd and come in at the END of a trend.

Investor Type #2: The Trendsetter

Just like in fashion, there are people who follow trends and people who “set” them. Trendsetters look ahead to catch the next cool idea.

In the investing world, you really can’t force masses of people to buy a trendy stock that’s already surged 10% in a day. What you can do is look at underlying changes that aren’t in the headlines today, but could be in the headlines tomorrow.

We do a lot of this type of analysis here at Smart Investing Daily. Many of the ideas that we bring you are not yet making headlines or perhaps are linked to the headlines in a unique way.

For example, when I heard that Dick Durbin wanted to slash credit card fees down to 12 cents, I thought about the real benefit of this action. I thought about all the players involved — the banks, the credit card companies, the retailers and the average Joes.

In this case, the American consumer had little to gain, the banks and credit card companies had a lot to lose and the only one that would really make out in my opinion would have been the retailers. Even though politicians do some dumb things, I couldn’t see it passing.

I didn’t think that this rule made sense at all and the average consumer really wouldn’t see much of a benefit.

These thoughts and sound company fundamentals are what prompted me to look into MasterCard back in March. It paid off well and my analysis became reality yesterday.

I believe that the most successful investors use this method and combine it with some other analysis, like fundamental analysis, to reap the most rewards.

Investor Type #3: Bottom Fisher (and Unrealized Potential)

The third basic type of investor out there is the bottom fisher. This investor type knows a great deal about a company and buys a stock because it has been so battered and bruised that he believes it has only one way to go… up.

Bottom fishers believe beaten-down stock will either recover or get acquired by a bigger company.

But bottom fishing can be dangerous, because you never know how far a failing stock can fall.

An example of this would be Nokia (NOK:NYSE). I remember sitting at the Fast Money desk on CNBC in Times Square this time last year and listening to Tim Seymour recommend buying NOK shares. (I have a great respect for Tim, by the way.)

He thought the stock was cheap on a price-to-earnings basis — a good argument. But Tim also thought NOK was very cheap dollar-wise. It was trading just below $10. Unfortunately, Nokia still had room to fall and given the size of the company, it was a tough one to acquire. Nokia has since seen its shares slide to $5.80.

Stocks can be cheap for a reason.

That said, unrealized potential can create huge gains in a stock. But you must do your homework and know a great deal about a company and its sector.

An example of a stock with unrealized potential is Universal Display Co. (PANL:NASDAQ). I was the first to talk about this company on CNBC back in October of 2009.

Watch Jared on CNBC

I saw potential because PANL holds many patents when it comes to high-efficiency lighting technology like OLED and AMOLED used in computer, phone and TV screens.

I saw its technology entering the smartphone, home theater and advertising markets, and the stock was only trading around $11.50 at the time.

There was high risk here, but again the payoff was HUGE! Over the course of the next 16 months, the stock jumped over 450%.

If you are looking for unrealized potential, it will usually be in a stock that NO ONE has ever heard of. Discovering these diamonds in the rough is almost as hard as pulling the precious stones from the ground themselves.

While this last style of investing can be very lucrative, the risks are also elevated.

Smart Investing Daily’s Investment Style

Here at Smart Investing Daily, instead of following one mindset, we try to blend styles together and mix in some helpful tips to uncover both opportunity and dangers in the marketplace. Sara and I both have very diverse backgrounds and methods that keep our ideas unique, fresh and most importantly, profitable if we can.

(Sign up for Smart Investing Daily and let me and fellow editor Sara Nunnally simplify the market for you with our easy-to-understand articles.)

In the past, many of our investment selections have been right on point. Please let us know what you think about our service and if there are any topics you want us to explore!

And don’t forget to tell your friends about us. I’m sure my friend in NYC would have loved to have been on our list back in March.

Publisher’s Note: As Jared wrote, his WaveStrength Options Weekly readers were in and out of MasterCard with strong profits long before yesterday’s news. It is a prime example of how his system works. Jared prides himself on consistently banking 15%, 20%, even 50% gains.

It is not a shady get-rich-quick program. Jared’s faithful subscribers are getting rich with safe, reliable profits. To get his latest advice, click here.

Article brought to you by Taipan Publishing Group. Additional valuable content can be syndicated via our News RSS feed. Republish without charge. Required: Author attribution, links back to original content or www.taipanpublishinggroup.com.

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Things have gotten rough in the financial markets. Investors are looking for the next “safe haven” stock. And I’ll show you how you can buy it for 10% less than where it’s trading at!

Let’s look at why investors are looking at defensive stocks right now.

When times get tough, investors start to eye traditional defensive companies like Johnson & Johnson (JNJ:NYSE), Clorox (CLX:NYSE), Pfizer (PFE:NYSE) and Procter & Gamble (PG:NYSE). Utility and energy companies like Exelon (EXC:NYSE) and Exxon Mobil (XOM:NYSE) also attract investors when the future looks murky.

Tobacco and alcohol giants like Phillip Morris (PM:NYSE) and Diageo (DEO:NYSE) tend to come into favor, too, because consumers take up more bad habits when they are experiencing hardships in a down economy.

Usually defensive companies like these increase in popularity after the market has had a bullish run and a slowdown seems like the next step of the economy. Investors see these defensive stocks as a “safe haven.” But even though they are considered defensive, these stocks can and will drop in value.

In fact in 2009, many of these defensive stocks lost nearly as much of their value as the major market indexes! That’s not really defensive, is it?

What About America’s Situation Now?

We are supposedly emerging from a recession, but economic data doesn’t look so rosy. Do you really want to put your money into traditional defensive sectors like food and energy, or even “vice” companies that only seem to be safe havens?

What if I told you about a “defensive” stock that could outperform traditional safe havens? And what if I told you that you could buy this stock at a 10% discount?

I want to tell you about a company that creates an extremely strong, positive bond between citizens that is tough as nails. It provides an escape from stress, encourages creativity, individuality and is a symbol of freedom and the American way of life still yearned for around the world.

Oh and by the way, it is making TONS of money, offers a small dividend and is somewhat “green.”

Harley-Davidson, a Defensive Alternative

In this marketplace, you have to think outside the box. I always say you should invest in what you know. Since I have been riding, repairing and building motorcycles since I was five, I can tell you that this is an area I know a lot about!

I think of Harley-Davidson (HOG:NYSE) as a slightly older, tanned Apple computer, wearing leather chaps with a couple tattoos. How’s that visual for ya?

Harley-Davidson has created an obsessive culture that reveres, collects and lives to ride its products since 1903. I’ve ridden all over North America and Europe, and I can tell you that the obsession is still strong.

When I ride to Sturgis, Laconia, Daytona, Myrtle Beach, Austin and Laughlin, Nev., cities that host the largest bike rallies in the U.S., the majority of the bikes there are Harleys… and no two look the same.

They are dependable, high quality, sexy and command respect! That is hard to come by when you’re a biker.

Harley-Davidson does have competition and from time to time fads and custom bike builders gain popularity, but Harley still manages to reinvent itself time and time again. Its tried and true machines remain not only relevant, but dominant.

Recently, the company has streamlined its business to improve profitability and just reported a 10% rise in retail sales (year over year) along with a 74% rise in 1Q profits compared to last year.

Many are looking to Harley-Davidson for continued growth.

Middle-Class Stress Relief

The world’s middle class is growing at a breakneck pace. More men and women around the world now have disposable income to buy “toys.” You see, my belief is that we all need an escape from time to time to keep ourselves sane. Spending thousands on a five-day vacation is nice… but spending fifteen thousand on a machine that can provide you with hundreds of mini vacations over the years makes more sense to me.

It’s much easier and more practical to hop on your Harley after a bad day at work and take a spin, rather than to plan a full-blown vacation.

They are not all fun and games; motorcycles also offer practical, pleasurable daily transportation and are much easier to park in dense areas.

Did I mention they get great gas mileage?

Harley-Davidson knows that its bikes are a mini vacation on two wheels and the company is going after customers globally.

According to several sources, Harley is looking to open dealerships in Ahmedabad, Chennai and Kolkata, India, by the end of 2011, offering premium, inexpensive bikes. It already operates high-end dealerships in Delhi, Mumbai, Bangalore and Hyderabad. India, like China, is fast creating a middle class.

Harley also operates its own financing arm, bringing would be riders one step closer to the rumbling of their V-twin engines.

Taking a Ride

The motorcycle may be one of the last youthful freedoms left on Earth (at least in my eyes). I cannot tell you what it’s like to experience the world on two wheels in the open air, taking in the sights and smells of the countryside. I’ve experienced unusual kindness, generosity and wonderment from most of the world on my Harley.

It’s a feeling that you can only get by being on one, and I believe that once you do, you are hooked for life. Harley knows this too and markets the “lifestyle” heavily.

Over the past couple weeks, the market has been correcting. But Harley has been moving higher and has broken ABOVE its 200-day moving average. I call that pretty darn defensive.

It may not be a traditional defensive stock, but Harley is worth a look. It’s a stock that I believe will thrive through these uncertain times.

Of course if there is a complete meltdown, no stock will be safe, but that is the risk you take as an equity investor.

Buy HOG for a 10% Discount

As an options trader, I would be remiss if I didn’t show you a cool, simple tactic that you can use to buy HOG for $34.75, when it’s trading at $38.25.

For the option traders out there…

The cash secured put is a great way to acquire stock. If you are bullish on HOG, you can sell the August 36 put for $1.25. This means that you are obligated to BUY the stock at $36 a share until August 19 and getting paid $1.25 per share to do so.

Every put contract you sell obligates you buy 100 shares, so remember to set aside 100 x $36 or $3,600 for each put. The cool thing is that the $1.25 credit you get is yours to keep! So if you are buying stock at $36 and getting $1.25 (per share) you are only paying $34.75 for a share of Harley!

If the stock manages to stay above $36 by the time these contracts expire on Aug. 19, you simply keep the $1.25 for a 3.5% return! If the stock is below $36 on that date, you will be the proud owner of the stock.

But again, while everyone is buying it at $38.25, you’ll own shares of Harley at $34.75, an automatic gain of 10%!

P.S. While the technique I outline may sound complicated, it is not. I made my living off of trades just like this one. Now that I have created a reliable stream of income, I spend my time teaching others and showing them the vast opportunities that exist in this little-understood realm.

Written by Jared Levy for Taipan Publishing Group. Additional valuable content can be syndicated via our News RSS feed. Republish without charge. Required: Author attribution, links back to original content or www.taipanpublishinggroup.com.

By Chris Vermeulen, thegoldandoilguy.com